Business insurance policies to consider when starting a business.
August 3, 2022
Why should I have commercial insurance?
You should consider purchasing commercial insurance to protect your assets and hard-earned money if you are thinking of starting your own business. For a brand-new business owner, there are many things to consider before you open up shop, such as finding good people to work with, reliable vendors and commercial insurance policies you might need. Why do you need insurance for, anyway?
You should purchase commercial insurance if you want ways to better protect your company assets, your continued business income, and your personal savings.
For certain types of businesses, getting licensed and being registered often requires having specific insurance policies in place (e.g., trade skills, construction, medicine, etc.) Make sure you’re aware of your insurance requirements before deciding to open for business.
Business insurance can help cover the expenses of liability lawsuits and property damage. You might think of it as a kind of business airbag, able to take most of the financial impact of a mishap or accident that occurs while running an enterprise. Covered expenses could include:
- Attorney’s fees
- Court costs
- Settlement and judgments
- The cost to repair or replace property
- Continued income while your premises is being repaired
Should I get new business insurance right away?
One of the reasons you may want to consider securing commercial insurance right when you start a home-based business:
- Your homeowner’s or renter’s insurance likely has insufficient protection and It’s generally expensive to broaden coverages.
If you’re working out of your home, chances are your homeowner’s or renter’s insurance won’t cover you for business-related accidents. So, if a customer visits your home office, slips on your kid’s toy truck or a badly or non-shoveled driveway, and sues you for his broken ankle, you may be out of luck if you’re relying on your home coverage.
Commercial insurance is designed for these kinds of scenarios. You can be protected from day one of starting your operations.
Types of Business insurance policies you should consider
When starting a new business, these are the four policies most likely to benefit you. Take a look to see which ones can help your business.
Business Owner’s policy
A business owner’s policy combines the protection of General Liability insurance and Property insurance into one convenient, discounted bundle for small, low-risk businesses. It can provide coverage for:
- Third-party lawsuits over bodily injury
- Third-party lawsuits over property damage
- Product liability lawsuits (a customer sues you after being hurt by your product)
- Immediate medical expenses for third parties injured on your premises
- Theft, vandalism, or destruction of your business property, including equipment, buildings, and supplies
Professional Liability insurance or Errors and Omissions insurance
This is important insurance to have if you offer professional services, because it provides coverage against claims that you make or fail to provide adequate service as promised. Professionals that typically carry this coverage include:
- IT professionals
- Medical doctors
Cyber Liability insurance
Cyber liability is a rapidly growing area of concern as more businesses become targets for cyber criminals. If you store lots of sensitive information about clients or customers (especially credit card numbers), you may want this coverage in case of a cyber-disaster.
Commercial auto insurance
Just as your homeowner’s insurance isn’t likely to cover you for business-related accidents, your personal auto insurance probably isn’t sufficient either. If you use a company vehicle (or your personal vehicle is the company vehicle), best to explore commercial auto insurance. If you rent a vehicle for use or your employees use their own cars to do work-related tasks, then you should secure hired and non-owned auto insurance to protect them and you.
About CMR | PolicySmart® www.policysmart.com
PolicySmart’s’ risk management consultants provide independent Group Benefits, Retirement and Commercial Insurance advice by reviewing your current portfolio of policies to improve coverage and reduce cost. By using our proprietary database – The CMR Database® (comprising some 13,000 brokers and specialists globally), we maximize access to the insurance and retirement industry providing greater options that will translate to better coverage and lower cost.
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